Low Taxes - High ROI
Companies that invest in Brandenburg benefit from Germany’s lowest trade and land tax rates.
Low Trade Tax Rates in Brandenburg
Brandenburg offers the lowest tax rates in Germany. The average trade tax rate in the region (index 319 in 2007) is nearly 20% below the national average.
Average trade tax index in Germany
Low Land Tax
Likewise, the rates for the A and B land taxes in Brandenburg are also below the average in Eastern and Western Germany.
Average rates for the A and B land taxes (in %, 2007 data)
2008 Corporate Tax Reform
Germany has considerably improved its tax framework in the past few years. The reform of the corporate tax that came into effect on 1st January 2008 further improved the attractiveness of the country for international investors.
The central point of the reform is the decrease of the tariff-based tax burden (corporate tax, trade tax, solidarity levy) of public limited companies by almost one quarter from about 39% to below 30%. For this purpose, the government lowered the corporate tax rate by 10% from 25% to 15%. At the same time, it lowered the trade tax rate from 5% to 3.5%. Assuming a trade tax rate of 400%, the profit tax burden of a public limited company drops to below 30%. After the 2008 reform, Germany’s tax burden now corresponds to the European average.
Nominal tax rates on corporate profits (in %, 2006 data)
Consequently, the fiscal advantage of the new EU member countries in Central and Eastern Europe on Germany as regards the tax rate on corporate profits is decreasing distinctly.
Sources: BMJ, 2007; KPMG, 2007; DIW, 2007; Statistisches Bundesamt, 2007.